India Aims to Become the Pharmacy of the World: Securing its Future

11 March 2024

India, the fastest-growing economy in the world, and the emerging leader in the Global South, announced a visionary plan to make India a manufacturing house for life-saving drugs and critical medical devices. This strategic move, taken by the Indian health minister will completely transform the Indian pharmaceutical industry from net importers to net exporters.

Additionally, the move aims to secure the supply chains to meet the global demand for pharmaceutical products by ensuring API (Active Pharmaceutical Ingredients), bulk drug parks, and sustaining growth. Explore how Indian pharma covers the global markets.

As per the reports, the market size of the Indian pharmaceutical industry will increase from its current position of 1.5% to 10-12% within the next 25 years, and the market value of medical devices will reach USD 50 billion by 2030. Discover how the Indian pharmaceutical industry trades worldwide, and understand how businesses and manufacturers across the globe can take advantage of Indian export markets.

Market Share of the Indian Pharmaceutical Industry

The importance of life-saving drugs and medical products comes into the picture just after the pandemic. Now, try to understand the market trend before and after the pandemic time.  From the table, it becomes clear that the export of pharmaceutical products from India continuously increased from USD 16.2 billion in 2019 to USD 19.7 billion in 2022, and is expected to cross USD 21 billion in 2023 based on the estimated values by analysing the table. This continuous growth from 2019 to 2020, can be attributed to various steps taken by the government to boost the sector after the pandemic.

***Value Billion USD

Life-saving drugs and critical medical devices are the backbone of any country’s health infrastructure. Dive deeper to understand how the Indian pharmaceutical industry plays a crucial role worldwide by segregating trade data on India’s total export of pharmaceutical products by country.

The table shows the USA is the largest importer of Indian pharmaceutical products, and the trade value between the USA and India is more than USD 6.7 billion in 2022, increased from USD 6.3 billion in 2019 during the pandemic. The demand for pharmaceutical products reached new heights. India’s trade with Belgium in the same commodities improved by three folds in 2022. Refer to the table for more insights.

***Value Million USD

 India’s Top Exported Pharmaceutical Products

If categorizing the Indian pharmaceutical industry by-product, then the export of medicaments consisting of mixed and unmixed products from Q1 to Q3 of 2023 increased by USD 276 million, whereas the export of certain top commodities like Human and Animal blood prepared for therapeutic, etc. decreased by USD 38 Million. Check out the insight below. 

***Value Million USD

Export Of Pharmaceutical Products to Africa, Asia, and Europe

The export of Indian Pharmaceutical products including bulk drugs APIs and critical medical devices shares the largest market size in Africa with more than USD 4330 million in 2022, and in Asia, it is USD 4023 million in the same year. After the pandemic time, the demand for Indian pharmaceutical products in Europe increased from 2020 to 2022. As per the market dynamics, this increasing trend will continue.

***Value Million USD

Bilateral Trade Between China and India for Pharmaceutical Products

There must be a question regarding the total value of pharmaceutical products that India imported from China, and how India’s ambitious move will help to become a global pharma leader by diversifying the supply chains? Let’s try to understand this.

India’s Import of life-saving drugs and medical devices from China during 2018-2021 witnessed a positive trend from USD 143 million to USD 215 million despite the global challenges, especially during the pandemic time. This growth took a downward path after 2021, with imports seeing a steepest downfall from 215 million in 2021 to 125 million by 2023 Q3.

***Value Million USD

Here are the reasons for the declining bilateral trade between India and China in the Pharmaceutical sectors.

     Shift In the Policy

India wants to change its status from net importer to net exporter of pharmaceutical products.

Rising price of APIs and Other Drugs

Since the pandemic, the base price for Pharma-related products like the cost of certain API drugs like fever and pain relief medication, paracetamol, and life-saving antibiotic meropenem increased by 200%. 

Quality Concerns

The Indian Pharma industry focuses more on quality than quantity to tap the exponential market from the West.

Geo-Political Tension

Bilateral trade from both sides is facing problems due to ongoing geopolitical issues like border disputes and trade protectionist policies. 

India’s Master Plan to Become a Global Pharma Leader

Here are some strategic steps taken by Govt to make Indian Pharma Industry a global leader. 

     Production Linked Incentive Schemes for APIs, Bulk drugs, and medical devices

This scheme offers financial incentives to manufacturers on an incremental basis along with tax rebates.

Set Up Bulk Drugs Parks

To attract manufacturers across the globe, govt is identifying suitable places for drug production.

Simplifying the Patent Process

Working on Patent regulation to make it easier for companies to manufacture generic drugs to deliver cost-effective drugs to increase revenue.

Export-Oriented Policies

Programs and initiatives are designed to promote made-in-India drugs in the global market.

Working on Free Trade Agreements (FTA)

Negotiating on FTA opens the doors for pharma manufacturers to access the global market, for instance, India is currently engaged in FTA with, the EU, UK, Canada, etc. 

Steps taken by Govt to make India a global pharma leader to ensure the seamless connectivity of supply chains require India to build and maintain a business-friendly environment to attract new manufacturers to start the production of life-saving drugs and critical medical devices.